The Blog

How much does an iPhone app cost? Part III

In Part I, we introduced the different types of applications. In Part II, we introduced the development team and gave some rough figures for how much each component costs. Now, we’re going to play with the numbers.

It should cost much less!

Sometimes it does. Certain applications may simply not need certain components. Coke or McDonalds may not need a PR campaign to launch an app–their existing brand recognition may be enough. Highly technical apps designed for engineers may not require much in the way of design work–accurate technical bits may be enough. Apps that rely heavily on off-the-shelf components may not require much QA. And so on.

You may elect to learn some of the disciplines and do them yourself. We’ve had professional graphic designers, marketers, and even other developers as clients, and so in these situations it’s not uncommon for a development firm to back off and have the client take more responsibility for the project–reducing the cost. But if you’re not a professional, taking on responsibility can be a costly move when measured in terms of lost sales.

Another tactic is to aggressively cut scope to reduce costs. It may be possible to cut features to get a Client/Server Application into the Standalone category, or to significantly reduce the complexity of the server tier by cutting features. By reducing an application to a mere prototype, it may be possible to produce something tangible that can be used to acquire funds to develop it further.

There is also a certain amount of variation in developer costs. For instance, we have no sales team to pay, and since we rely primarily on the strength of our work for business, our marketing budget is close to zero. So our costs tend to be lower than shops with an army of sales staff and billboards on both sides of the street. On the other hand, our estimates tend to be more accurate than the competition, and since projects are universally underestimated, sometimes realistic numbers can be higher than what others quote. These effects can cancel each other out.

But far too often, instead of responsible scope cuts and other cost-cutting measures, corners are cut instead. Software may be outsourced and developed poorly, QA may be forgotten entirely, design may be sent to the back of the bus, and so on. In the rush to ship some product, it’s easy to lose track of what the value of that product is.

Suppose you are trying to build a strip mall in a populated area. You find a plot of land that is next to a high-traffic road, do some research to determine that a strip mall could be reasonably successful, and start talking to architects and contractors. They tell you that a typical strip mall is constructed for in the neighborhood of $5M. Unfortunately, you only have $20,000 for the project. Undeterred, you start trying to cobble together a team of temporarily-unemployed electricians on Craigslist, some freelance architects in India, and since the budget for materials is tight, you decide to construct it from corrugated cardboard. It does not take a genius to work out that this will not be a successful project.

In fact, there are many successful avenues open to you–with $20,000 you could build a furnished treehouse or shed, you can give your home a new room or a remodel–these are realistic construction projects within your budget. These projects have the advantage that you are not simply throwing your $20,000 away.

The same common sense does not seem to extend to iOS projects. Undeterred by the true cost of building that strip mall, many people are trying to piece their apps together out of corrugated cardboard. But unlike the construction industry, where there may be building codes, inspections, city ordinances, standards of practice, and professional organizations to protect people from scams and swindlers, there is unfortunately no equivalent for software development. It’s the closest thing there is to a completely deregulated market. And it’s the perfect condition for a lot of companies to come out of the woodwork to say what people want to hear–that with this industrial strength corrugated cardboard, you too can own a strip mall! It’s a sales pitch older than Amway.

Wrapping Things Up

I hope this series has shed some light into the time, effort, and cost it takes to launch a successful iPhone or iPad app. I’ve barely scratched the surface of what goes into project costs, even in a massive three-part blog post!

There are many factors to consider when thinking about any software development project, and every situation is unique. If you’re interested in talking to a real developer about a realistic way forward for your project, get in touch.